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Googleocracy

By Charles Lee Mathews on 15 December 2008

One the world’s most revered brands, you’d think Google would employ best practice in setting up a local office. Not so. The search giant’s presence here is marked by a lack of local development, no commitment to equity and a company structure that sees revenues originated in this market shipped offshore.

In this opinion:

Google SA could do with diplomacy

No commitment to diversity

From underdog to overlord

The perceptual tipping point

Can we trust Google to be good?

One of the top gainers in Interbrand’s annual ranking of The Best Global Brands, Google jumped from a ranking of 20 in 2007 to 10th spot in 2008. However Google’s brand, reputation and founding principles are being tested in South Africa where the brand has a fraught relationship with local search marketing companies. The whole Google accreditation saga clearly showed this market could do with a little less sales aggression and a lot more communication, advocacy and diplomacy.

Poor market communication
Google SA’s agency certification may weed out rot, but it clearly hasn’t been well thought through and the communication of this can only be described as a shambles. In speaking to Google SA’s country manager, Stafford Masie, I asked him why the announcement wasn’t better communicated. His response was typical of an arrogant organisation verging on monopoly that bristles to criticism. He said he would communicate or not, as he sees fit.

While disruptive technologies and cutting out the middle man is to be lauded in general, what is worrying is Google’s “go direct” approach in a region where search marketing is in its infancy. The online marketing sector in general and search marketing in particular has not yet benefited from diversity, nor has there been adequate equity or skills transfer in this industry. Search marketing has the potential of becoming a huge, global industry for South Africa that can attract enormous revenues that contribute solidly to this economy.

If blame must be shouldered, then one would have to thank the government’s protectionism of Telkom which has denied internet access to most South Africans and realised a country that even today is largely broadband deprived. Despite a more deregulated environment access is not pervasive, while upstarts like Dabba on a quest to network impoverished townships with a collaborative commerce initiative are threatened by Icasa and the morass of stifling telecommunications law.

Missing the brand-hero boat
In a better world one of the first things Google could have done when entering this market would be to claim the high ground as a hero brand. To challenge bandwidth deprivation or at least to level the emarketing playing fields by establishing a search marketing academy for PDIs. Or invigorate the sector by creating a certification that is free, fair and respectful of the DTI’s equity codes.

Instead Google has been blind to industry issues. This as revenues made by search agencies in this region bypass Google SA, going off shore to Google Ireland.

Speaking to Masie while doing research for my story The bumbling behemoth it was evident Google has no plans in place for the transfer of skills to PDIs, the seeding of PDI agencies nor any equity or development programmes.

Like a Microsoft, IBM or HP, Google is a global giant. As such, every move it makes will be scrutinised in every market it operates in. Particularly as it is no longer the much loved geeky underdog. Google is now the overlord. A behemoth edging towards monopoly that will naturally attract watchdogs.

Then there is the issue of a perceptual tipping point. As Google grapples with privacy issues, unbridled growth and unchecked power, it’s founding “do no evil” mantra is being strenuously tested.

Do no evil?
And Google struggles in full public view because the behemoth is the purveyor of transparency and information freedoms. Each time Google stumbles like it did by capitulating to China’s demands to self-censor; or when the company’s products and services are used to do harm as seen with media reports that Google Earth was used by terrorists in the Mumbai Attacks; business, public and investor sentiment will be tested.

When Google errs the world will ask again, and again: “Can we trust Google to be good?” The tipping point will be reached when enough opinion “influencers” no longer believe that Google can be trusted to do the right thing.

A case in point when doing the Google story was an allegation of media manipulation made by a search marketing expert who did not want to be named. This source said Masie assembled a cabal of local journalists who received privileged information from Google on the proviso that they were favourable toward Google in the media. The source said that ITWeb journalist Paul Vecchiatto had been invited to participate, but that Vecchiatto was disgusted with the idea and declined.

Allegations of media manipulation
In speaking to Masie he rubbished the allegation, sounding affronted that I had even mentioned it. Masie’s PR representative Craig Rodney of Emerging Media said that he’d resign the Google account on this spot if this claim was corroborated, because it would undermine Emerging Media’s credibility.

I spoke to Vecchiatto, who said that Masie had indeed invited him to join a group of 12 to 15 journalists who would meet Masie every quarter. Vecchiatto added that information given at these sessions would be “off the record”.

“Basically it’s like us doing Google’s PR. That’s the implication of having a select group of journalists who would meet ‘off the record’. The implication is that the journalists become an unofficial mouthpiece for Google, which is ridiculous because as an international company that is listed on Nasddaq everything Google does should be open and transparent. Google is a market in their own right, such as the JSE, and has to be very fair about what it does and the way it disseminates information.”

At the time of the conversation Vecchiatto says Masie told him: “This is a strategy Google has used in other geographies and has worked very well for us.”

The conversation between Masie and Vecchiatto took place in front of Cape based freelance journalist, Morgan Behr. I phoned Behr who corroborated Vecchiatto’s statement, saying it was both true and accurate. Pundits in the ICT industry will remember that as country manager for Novell, Masie was involved in the Microsoft/Novell deal of 2006 which was met with widespread controversy and efforts to boycott Novell.

Riding roughshod over emerging markets
With emerging markets showing double digit growth and Google’s share price taking a beating back home, Google would be wise to reconsider the way it operates in emerging markets.

As a South African with vested interests in this economy, I hope for the sake of diversity and the potential for a huge global facing industry, that Google will change the way it does business in our country.

Read “Bumbling behemoth” — Mandy de Waal’s story on how Google’s presence in this market is marked by controversy, confusion an a lack of commitment to diversity, equity or skills transfer.